Category: Banking Crisis

NTMA Review of 2009

The NTMA has released its review of its 2009 activities. Link here.

In relation to the coming year, the report says that “The NTMA plans to raise up to €20 billion in the bond markets in 2010. This requirement is significantly less than in 2009 because of a smaller projected Exchequer deficit of €18.7 billion and a lower refinancing requirement of €1.2 billion.”

These figures do not include any allowance for any borrowing that may be triggered by bank recapitalisation requirements. That said, the National Pension Reserve Fund had a good year thanks to the rise in international stock markets and its value now stands at €22.3 billion. Excluding the €7 billion held in preference shares in AIB and BOI, this leaves €15 billion that could, potentially, be used to recapitalise the banks without borrowing.

Iceland’s President refuses to sign Icesave deal

Iceland’s president refuses to sign the Icesave deal, which would pave the way to reimburse Britain and the Netherlands for nearly €4bn lost in a failed Icelandic bank. According to the FT he took this decision as it was “in the interests of democracy to put the legislation to a referendum, given the importance of the issue to Iceland’s future”.  NAMA would seem to be similarly important to Ireland’s future?

Insider Stories from Iceland

The literature on the Icelandic crisis is growing.  While the report of the ‘Truth Commission’  is eagerly awaited, it is also very interesting to read insider accounts of the crisis.

I found Why Iceland?: How One of the World’s Smallest Countries Became the Meltdown’s Biggest Casualty by Asgeir Jonsson to be an excellent read.  Jonsson was the Chief Economist at Kaupthing Bank.

A new release is Frozen Assets: How I Lived Iceland’s Boom and Bust, which is written by Armann Thorvaldsson, a former CEO at Kaupthing in the UK.

While it is illuminating to read such insider accounts,  it is also important to recognise the inherent trade off:  such individuals have access to non-public information and can provide a unique perspective; however, by the same token, the interpretations offered in such books are not necessarily fully balanced.

Still, it would be very helpful if senior figures in the Irish banks provided such insider accounts of the boom and bust in the Irish banking system.

McArdle: 15% = 0%

Pat McArdle’s review of the economic year contained the following description of the banking crisis:

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Cowen on NAMA Getting Credit Flowing

In a year-end interview with Jody Corcoran in the Sunday Independent, the Taoiseach answered questions about NAMA. The relevant passage is below the fold.

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